Also Now Issuing Bonds: Bolivia, for First Time Since 1920

By Michael Aneiro

With borrowing costs so outrageously low that 800-year-old Cambridge University just issued its first-ever bond, it’s not surprising that some other unusual institutions are stepping up to the capital markets’ borrowing window. Like Bolivia. Per Bloomberg, the South American country is gauging investor interest ahead of its first planned overseas bond sale since 1920. From Bloomberg’s report:

The government hired Bank of America Corp. (BAC) and Goldman Sachs Group Inc. to arrange the meetings, according to three investors contacted by the banks. The discussions, which are scheduled for Oct. 15 to Oct. 19, will take place in Europe, the U.S. and Latin America, according to the investors, who asked not to be identified because the discussions are private.

Emerging-market countries that have never sold debt or last did so years ago are issuing bonds to take advantage of the lowest borrowing costs on record. The yield on emerging-market debt fell to a record low 4.68 percent last week, according to JPMorgan Chase & Co., as investors looked for alternatives to near-zero interest rates in the U.S. and Europe.

“People are looking at countries off the beaten path to pick up some yield,” Alejandro Urbina, who manages and gives advice on $800 million of emerging-market assets at Silva Capital Management, said in a telephone interview from Chicago. “They’re coming at a good time.”

Bolivia plans to raise as much as $500 million selling bonds at a yield below 10 percent to fund mining and electricity projects.